Fiscal Brinksmanship: Alternate Realities

A recent and uniquely dangerous situation has reminded me yet again how very different reality is for some people. I refer to the denizens of the Washington DC Beltway–including politicians and media personalities–as opposed to people that live in the real world and therefore have to judge others not only by their words, but by their actions.

On the 12-02-12 edition of Fox News Sunday, Chris Wallace dealt with the looming fiscal cliff and interviewed Treasure Secretary Timothy Geithner, who as regular readers will recall, is a notorious tax cheat. Consider this surreal exchange:

WALLACE: The president campaigned for re-election on the idea of a, quote, “balanced approach,” end quote, to deficit reduction — a mixture of tax increases and spending cuts. Here’s the plan that the Republicans say you presented to them this way —

GEITHNER: It is. And let me explain what is in the explain they didn’t report to you and they didn’t explain to people, which is, we propose alongside the trillion dollars in spending cuts we agreed with Republicans, last year, on defense and a comprehensive range of other government programs, we proposed $600 billion of detailed reforms and savings, to our health care and other government programs. That’s $600 billion.

In fact, the health care savings in that plan are larger than the plans we have seen Republicans in the past in the context. Now —

WALLACE: Is that — is that what was in the budget?

GEITHNER: Well, these proposals have been — we proposed these things last fall and in the president’s budget, they are very detailed. Now —

WALLACE: That was a budget voted down 99-to-nothing in the Senate.

Only in the Beltway could that be considered a balanced proposal. Mr. Wallace forget to mention–and so did Sec. Geithner, a man from who I would never buy a used car–the demand to give Mr. Obama absolute authority to raise the debt ceiling whenever he feels like it to any level he prefers, which authority might well be prohibited by the Constitution, but when has that stopped Mr. Obama?

Wallace asked Mara Liasson of NPR what’s going to happen? Will America be driven over the fiscal cliff by Mr. Obama? She replied:

You know, what happened this week is pretty interesting. Either it is just kabuki theater and both sides are putting out their maximalist positions and fighting as hard as they can and saying the other guy is being intransigent, which is what they do to tell their troops that they are trying as hard as they can before they cave because the Republicans are going to have to move on tax rates, not just revenues, and, the Democrats are going to have to do a heck of a lot more on entitlement reform than is in the president’s proposal. That is what is going to happen if the deal is going to be done even if the deal happens after January, after a couple of failed votes. You know, after some kind of — a little bit of falling off the cliff. And, I continue to believe that that is what is happening, not that this thing is going to end in complete disaster.

Wallace queried former Senator Evan Bayh (D-IN), who believed the President is so concerned about his legacy, he will be anxious to work out a fair and reasonable deal before January. He added (referring to substantive entitlement reforms):

So, that is not sacrosanct and I think to get this result, particularly to get the significant increase in the debt ceiling, the president is going to have to give some there, and I think he will, and that will pleasantly surprise some people.

So avoiding the fiscal cliff depends on Mr. Obama suddenly becoming reasonable and pleasantly surprising people? In the real world, I’d get out of the car now while it’s still hurtling toward the bottomless abyss.

For those who haven’t been paying attention, let’s review: Senate Democrats have refused—in violation of federal law—to propose a budget for three successive years. In debt negotiations with Speaker John Boehner during the summer, Mr. Obama had a deal, but at the last minute, demanded an additional $400 billion in additional taxes, destroying the deal and putting us on the road to financial ruin.

Mr. Obama’s arrogance was legendary before the 2012 election. After he won reelection, there is even less reason for him to behave reasonably. With an opening negotiating position that drips or irresponsibility and unhinged arrogance, what reason is there to believe Mr. Obama will moderate his position? This is a man who believes compromise means he gets everything he wants.

Buckle up Americans. Regardless of whether feckless Republicans give Mr. Obama dictatorial financial concessions, we’re going over the cliff, now or later. Now will be painful, later will be disastrous. Mr. Obama is more than narcissistic enough to believe himself eternally immune from responsibility for his actions.

7 thoughts on “Fiscal Brinksmanship: Alternate Realities”

For one, a 5% reduction across the board on federal departments funding would be a start. In one particular area, the Department of Education, 50% of the budget should be slashed, as that outfit has been the direct cause of skyrocketing costs and inefficiencies in public education.

This should be coupled not with policies that would make money flee the United States but with policies that make it come to the United States. Lowering the corporate tax rate–perhaps eliminating it since the monies are taxed elsewhere and the costs simply passed to the consumer–would produce more wages and demand for local goods and subsequent tax revenues.

Another lucrative step would be a flat tax with no deductions. The IRS would be able to reduce its size, a savings in itself. The flat tax would be tiered, of course, with the higher income brackets paying a higher rate. However, it should be a principle that all should pay taxes. We should, or at least some of us, would like to avoid the time when people learn to vote themselves money.

this is just a start, but in reply to your honest plaint, there is hope, if only . . . .

Sorry to be pessimistic, but I don’t expect Obama to “pleasantly surprise” anyone with a last-minute deal. That would be the reverse of his normal overstep-to-the-max approach, and he has too high an opinion of himself to do that.

And he’s perfectly willing to let the rest of us suffer for his “vision” (which seems mostly to be an overblown view of himself as hero).

The wealth gap between rich and poor is at highest level since late 1920’s ( leading up to Depression).

A large wealth gap is bad for economy, as someone making $10 mil spends / invests into local markets differently than would 100 people making $100k (multiplier effect is lower) Reducing wealth gap will actually benefit economy

you assume that the money taken from X will be redistributed to 100 people. Sorry, but 99 percent will not arrive to the people. At least, not in the way that is conducive to creating and maintaining a responsible, culturally sound people. You may get food stamps or free cell phones, but not to people who will to learn trades to work. You may be dismayed, or maybe not, but we actually have government programs whose purpose is to create and maintain a dependency class. For a little look at that, I refer you to John Stossel’s expose of the New York City “work programs” of a couple of months ago.
You may be disappointed, or perhaps you don’t care as long as the “1%” “pay their fair share,” but tax revenues will decrease when taxes are raised. I refer you to data from the OMB, reported in the IBD:

“the assumptions [of the popular media] are faulty, based largely on political demagoguery rather than hard numbers — including ones certified by Obama’s own fiscal policy advisers and bean counters in the White House. . . . Based on Bush fiscal policies, the nonpartisan Congressional Budget Office projected budget deficits of 0.7% to 1.5% of GDP for the years 2008 through 2011. The CBO even predicted surpluses for the subsequent years through 2018. . . . Obama’s economic report shows that the average deficit-to-GDP ratio during the entire Bush administration — 2001 to 2009 — was 2%, which is well below the 50-year average of 3%. During the Obama years, in contrast, the same deficit ratio has averaged 9.1%.” This is not about raising tax revenues, but taking more money from people who can be conveniently demonized because they are wealthier and therefore less virtuous than a welfare teen-mom who has learned what offices to visit to obtain a steady flow of money. Sorry to be harsh, but there is a class of people such as this, and the Democratic party sucks its blood.

By the way, you wish us to infer that the wealth gap prior to the Great Depression was the cause of the Great Depression. This is novel and an argument made by no professional economists.

“By the way, you wish us to infer that the wealth gap prior to the Great Depression was the cause of the Great Depression. This is novel and an argument made by no professional economists.” — but historians on the other hand would be happy to inform you about the various wealth disparities that came before cataclysmic societal upheaval.

“This is not about raising tax revenues, but taking more money from people who can be conveniently demonized because they are wealthier and therefore less virtuous than a welfare teen-mom who has learned what offices to visit to obtain a steady flow of money. Sorry to be harsh, but there is a class of people such as this, and the Democratic party sucks its blood.” — I find this particularlly amusing since it comes before your “no professional economist” ascertation about some one else’s informed opinion.

“you assume that the money taken from X will be redistributed to 100 people” — I must admit, I don’t get that at all from having read the post. It seems to me that whenever some one metions “Tax hikes” it becomes redistributionary to a class of people, and not that revenues raised would go to other aspects of government that are NOT social aid programs, and just as equally “under” funded.

(1) Yes, and a great many other reasons exist for revolutions, such as simply a lust for power. You would have a busy day stamping out reasons for “cataclysmic societal upheaval(s).” –No more religious differences, no ethic differences, no class differences–the list is endless and would provide cover for any two-bit totalitarian.
(2) What informed opinion?
(3) The explicit point of the original post was that it would be redistributed to other people. I was only responding to the post.